Thanks for all the advice. I had thought about taking the surger (gasp!!!) to it. Really, the whole thing is much too big. I've even thought about cannibalizing it for another sweater, but I can't bring myself to do it.
The reason I was thinking felting was to make a jacket for me. Since this is 100% wool, it's much too hot for him. Unless we move to the tundra...or I make him sleep outside..hmm.... If I did felt it I would steek it down the middle and put in a zipper or something. But...I'm hesitant.
But, on the other hand, it's just sitting in the closet for now. Which also makes me crazy. I'll post some pics when I figure out how..